Branson v. Kitchenman

Opinion by Mr. Chief Justice Paxson, In the year 1884, the firm of Vernon, Blood & Co., manufacturers of hosiery, became embarrassed. At that time they were indebted to James Kitchenman, the defendant, in sum of $3,500 for borrowed money. The latter also held a purchase-money mortgage for $16,200, which covered the factory, land and machinery. They were also indebted for borrowed money to George Branson, whose estate is the plaintiff in this suit, and also to John Blood. John Blood was the brother, and George Branson was the cousin of George Blood, of the firm of Vernon, Blood & Co. The defendant does not appear to have been related to any of the parties. Vernon, Blood & Co. informed the defendant of their embarrassed condition, whereupon a consultation was had between them. and Branson and Blood, the other two creditors named. It was understood and [549] agreed by all, that it was the duty of the firm to protect the creditors from whom they had borrowed money. It was also desired by each of the creditors that some arrangement should be made by which the firm could continue in business, and, if possible, pay all their debts. With this object in view a meeting was subsequently held between these parties at the office of Albert S. Letchworth, Esq., a reputable member of the Philadelphia bar. It was there agreed, that Letchworth, acting as attorney for all the parties, should issue executions on the claims of said creditors, and sell the property of the defendant at sheriff’s sale. The property was so sold and purchased by Kitchenman, the defendant, in pursuance of this arrangement. It was understood that he was to hold the title to the property for the benefit of the firm, the business in the meantime to be conducted in his name, and at his risk. It was further understood that the property was to be turned over to the firm whenever it should be able to pay its debts. In pursuance of this arrangement the three execution creditors, before named, receipted to the sheriff on their executions for the proceeds of the sale. No money was paid to the sheriff beyond the costs. So far I understand the facts to be undisputed. The point of divergence comes in just here. It was contended by the plaintiff that the defendant had promised to pay the judgments held by George Branson and John Blood out of the proceeds of the sheriff’s sale. The defendant contended that these judgments were to be paid only in case the subsequent profits of the firm were sufficient to pay them. In point of fact there appears to have been no profits. The business was carried on for several years by Vernon, Blood & Co., in the name of the defendant, and resulted in a loss of from eight to ten thousand dollars. He alleged that the business had been badly managed by William Vernon and George Blood; that they had raised their own salaries and the salaries of the other employees without his knowledge or consent, and as a result he was compelled to discharge them. Suits were then commenced by George Branson and John Blood against the defendant, to recover the amount of their respective judgments, upon the allegation, as before stated, that he had agreed to pay them out of the proceeds of the sheriff’s sale. It does not appear that the plaintiff [550] ever made any demand upon the defendant, otherwise than by the commencement of this suit. With this brief explanation of the facts of the case we will consider some of the specifications of error. The first alleges that the court erred in admitting certain evidence in regard to the value of the machinery. The admission of this evidence was clear error. It was not relevant to the issue. It had nothing to do with the question whether there was a contract between the parties in regard to the payment of plaintiff’s claim, or of the nature of that contract. The second specification alleges that the learned judge erred in charging the jury as follows: “ In this situation of affairs there was an agreement of some kind made between the plaintiff and defendant, and a serious question which you are called upon to determine in this case is, as to what was that agreement.” We regard this instruction as misleading. The jury could not fail to have understood that the learned judge referred to an agreement between the plaintiff and defendant in regard to the payment of this claim. It is not pretended that there was any written agreement. If it existed at all, it was oral, and was proved by oral testimony. It was therefore for the jury to find whether there was an agreement, and, if so, what it was. The defendant utterly denied that he was to pay this claim, or that he had promised to pay it under any circumstances. It was only to be paid out of the business in case the business justified it. This was the vital point in the case, and the learned judge assumed a fact which could only be found by the jury. The defendant further contended that, even conceding the plaintiff’s statement to be true, it was a mere oral promise to pay the debt of another, and that it came within the statute of frauds. In this we think he was right. The mere promise to pay, made prior to the sheriff’s sale, was nudum pactum. It had no consideration to support it. This clearly appears from the testimony of John Blood, the plaintiff in the other suit, and the witness principally relied upon in this suit. This is so important that, at the risk of being tedious, I quote a few lines from his testimony: “Q. Do you mean to say that Mr. Kitchenman, who held the senior judgment, guaranteed the payment of your later judgment? A. He said he would. [551] Q. What reason did he give for offering to pay something you were not able to get otherwise ? A. He did not give any reason. Q. Did he ask you to do anything for him in consideration of that ? A. No, sir; he did not ask me to do anything. Q. Did he ask you to abstain from doing anything ? A. No, sir. Q. Did you give any consideration for his promise to pay your judgment? A. No, sir; nothing whatever. Q. I understand that, without any consideration from Mr. Kitchenman, without any promise on his part to do, or not to do anything, or any promise on your part to do, or not to do anything, he voluntarily said, out of the proceeds of a certain sale, to take place in the future, he would pay your notes ? A. Exactly; that is correct.” I do not recollect that any other witness testified to a contract between the plaintiff and the defendant. There was considerable loose testimony as to conversations between the defendant and others when the plaintiff was not present. The plaintiff, being deceased, of course, could not be examined, and the witness, Blood, being the plaintiff in the other suit, was vitally interested in establishing a binding contract between the parties. His statement of the alleged agreement was flatly contradicted by Mr. Letch worth, a wholly disinterested witness, who acted as counsel for all three of the creditors. It was also contradicted by the defendant. Moreover, the whole story has about it an air of extreme improbability. That Mr. Kitchenman, having no interest in the firm, should make considerable sacrifices to keep it afloat, is a matter we can understand, although such liberality is somewhat rare. That he should, in addition to this, also agree to pay the debts which the firm owed to their own relatives for borrowed money, is a proposition which requires strong testimony to support it. It is difficult to see how the jury could have rendered the verdict they did, unless misled by something that occurred upon the trial. The mere naked promise of the defendant, made before the sale, that he would pay the plaintiff out of the proceeds thereof, was, as before stated, without consideration. The plaintiff gave nothing, and promised nothing, for such agreement. There was nothing to prevent his bidding at the sheriff’s sale, and thus securing himself, if he saw proper to do so. There is nothing in the case but a bare promise to pay the debt of another. There [552] was not, in any sense, an original undertaking on the part of the defendant. The defendant’s fourteenth point, which prayed for a binding instruction in favor of the defendant, should have been affirmed without qualification. Judgment reversed.